Ford to pay C-Max owners after overstating hybrid's MPG rating

Jerry Hirsch

Bowing to criticism that its C-Max hybrid didn’t get the fuel economy claimed on its window sticker, Ford Motor Co. has restated the compact car’s mileage ratings and said it will issue special payments to people who own the vehicle.

Ford said it would make a special one-time, "goodwill" payment of $550 to people who purchased the C-Max and $325 to those who leased the vehicle.

Everyone will get the same payment regardless of when they purchased the car or how many miles they have put on their vehicle, said Raj Nair, Ford’s group vice president for global product development.

“We did not want them to have to come into dealers and have to prove their ownership over a period of time or have the dealer note their mileage,” Nair said.

Nair blamed the fuel economy label problem on “testing anomalies.”

The fuel economy rating on the C-Max actually comes from a test of its automotive sibling, the Ford Fusion hybrid.

The EPA said that label regulations allow, but do not require, vehicles with the same engine, transmission and weight class to use the same fuel economy label value data, “since, historically, such vehicle families achieve nearly identical fuel economy performance.”

But Nair said it turns out that the more aerodynamic design of the Fusion sedan actually yields better results. Ford is now labeling the cars separately based on separate tests. It is also making some transmission gearing and aerodynamic changes to the 2014 version of the C-Max to improve fuel efficiency, he said.

The new fuel economy estimates for the 2013 model year C-Max are 43 miles per gallon for combined driving, 45 mpg for city and 40 mpg for highway, said the Environmental Protection Agency, which regulates the fuel economy ratings that go on car window stickers.

Previously, Ford said C-Max hybrids get 47 mpg for all measures, including city, highway and combined ratings. Last month it offered hybrid owners a software update that it claimed would improve fuel economy.

This scenario could repeat itself with other vehicles, the EPA said, as it expects to see the greater use of common drivetrains to improve quality and reduce manufacturing costs.

The agency said it would work with consumer advocates, environmental organizations and automakers “to propose revised fuel economy labeling regulations to ensure that consumers are consistently given the accurate fuel economy information on which they have come to rely.”

Nair also noted that fuel economy for hybrids varies greatly by weather conditions, driving speed and the break-in miles on the vehicle, and those variables have caused owners' real world mileage to range both below and above the window stickers on the car.

Ford’s restatement of the C-Max’s MPG ratings comes against a backdrop of more scrutiny of automaker fuel economy claims.

Last year, the Environmental Protection Agency tested multiple Hyundai and Kia models that had become the focus of consumer complaints about fuel-economy ratings, and ordered changes to the labels. The agency said Hyundai and Kia overstated the fuel economy on more than a third of the vehicles they had sold in recent years.

The South Korean automakers issued an apology and said they would give special debit cards to nearly 1 million owners of the affected models to make up for the difference in the lower miles per gallon logged by the vehicles.

“Hyundai and Kia will be on the hook for millions of dollars per year compensating those consumers that purchased a vehicle with inflated MPG claims,” said Alec Gutierrez, an analyst with auto information company Kelley Blue Book.

Now that Ford is conceding its C-Max fuel economy ratings were overstated, “expect to see automakers stick to more conservative claims rather than risk the consumer and financial backlash that can result from inaccurate and inflated fuel economy estimates,” Gutierrez said.

Ford, Hyundai and Kia all are facing class-action lawsuits over their fuel economy claims.

Ford has received complaints about the fuel economy in both the C-Max and its popular Fusion hybrid.

Last year Consumer Reports said it was unable to obtain the stated mileage in its tests of the vehicles.

"After running both vehicles through Consumer Reports real-world tests, CR's engineers have gotten very good results. But they are far below Ford's ambitious triple-47 figures," said the magazine, which operates its own testing center in Connecticut.

The C-Max hybrid achieved 37 mpg overall, with 35 and 38 for city and highway, respectively, in the Consumer Reports tests. The Fusion hybrid delivered 39 mpg overall and 35 and 41 in city and highway conditions, respectively.

Nair said Ford was standing by its Fusion mileage label.

The C-Max is a key vehicle in Ford’s strategy to regain market share in passenger cars, compete more effectively against the Asian import brands and sell more vehicles on the West Coast.

"Ford wouldn't take such a drastic step if it didn't feel that it was absolutely necessary, even if it's just a move to protect its image,” said John O'Dell, the green car analyst at auto information company Edmunds.com.

Through the first seven months of this year, Ford has sold more than 23,000 of the C-Max hybrids, stealing sales that otherwise would have gone to the Toyota Prius.

“It might have some near-team impact on sales. But we will have to see how Ford manages it,” said Mike Wall, an analyst with IHS Automotive.

Hyundai did a good job of managing disclosure of its fuel economy misstatements so that it did not hurt sales appreciably, Wall said.

Many buyers were already aware of the issue because “we have had lots of reports that on a real-world basis, consumers were having trouble hitting those numbers,” Wall said. “I think consumers are taking a more skeptical eye to these fuel economy ratings.”